Is Microsoft Planning to Kill the Zune?

I covered this story for Gearlog today, but I think it’s interesting enough to discuss here as well. Paul Thurott, for all his often-crack-smoking-goodness, often gets the inside scoop at Microsoft earlier than a lot of people, and he has a pretty good track record for being right. So when he implies that part of the fallout of the Nokia and Microsoft partnership is that the Zune brand may be dropped so Microsoft can combine and focus all of its efforts into one unified mobile platform for both media players and mobile phones.

It likely doesn’t mean the end of the name, but it might mean the end of the Zune “brand,” but what exactly that really means? No one’s sure yet. Here’s what Thurott had to say over at his blog:

And what about Zune? Although both companies talked up virtually all Windows Phone-based services, Zune was conspicuously missing–both in discussions from both Elop and Ballmer and on a global reach marketing slide that was created by both companies. My sources tell me that the Zune brand is on the way out and that all Zune products and services will be moved into other businesses, including Windows Live. Zune will essentially cease to exist under this plan.

And here’s what I had to say:

Whether this means that new Zune and Zune HD digital media players will suddenly be renamed to something else, or that the Zune Marketplace will fold into the Windows Phone Marketplace, or that some new branding will appear to unify all of Microsoft’s mobile devices remains to be seen.

Even so, and assuming Thurott’s sources are correct, wiping away the Zune as a brand would be a pretty big feat for Microsoft considering how entrenched it is in XBox Live, in WIndows Phone 7, and as a name in the digital music space. It’s unlikely to be as dramatic as it seems, but it will be interesting to see what happens.